DEB KNIGHT:
Treasurer, good morning to you.
JOSH FRYDENBERG:
Good morning Deb, good morning Karl.
DEB KNIGHT:
Now unchartered, unprecedented, they’re the words being bandied around because the numbers you delivered yesterday, they are ugly. In terms of you, I mean it was going to be back in black, that's what we were touting before COVID-19 came along. Are you disappointed you had to deliver these sort of figures?
JOSH FRYDENBERG:
Well this is the harsh reality that Australia and the world finds itself in. I mean what we’re seeing now is a once in a century event with the coronavirus pandemic and the impact on the Australian economy is like nothing we have ever seen before. The good news, though, for Australia is that we are better placed both on the health front and the economic front than nearly any other country around the world. But at the same time we have seen unemployment go up and it will continue to go up. The Government is spending record amounts of taxpayers' money to try to keep people in a job and to cushion the blow from the coronavirus. But these are the uncertain times that we're living in and will continue to have the people's back.
KARL STEFANOVIC:
Treasurer isn't the reality that these numbers could be far worse given they're based on Victoria coming out of lockdown in the next four weeks, and they may very well not come out of lockdown?
JOSH FRYDENBERG:
Well Karl the country's really at two different stages because, you're right, in Victoria more than five million of my fellow Victorians are in lockdown, and that represents a quarter of the national economy. And of course we've seen a rise in cases in Victoria, more than 400 just yesterday. In terms of the rest of the economy, there's a gradual easing of restrictions in accordance with the decision of National Cabinet back on May 8, and what that has seen is more people get back to work. We saw in the jobs numbers just last week from the ABS for the month of June that 210,000 people found a job. Now, that was double what the market was expecting, 60 percent of those were jobs that went to women and 50 percent of jobs went to young people. So that’s a really positive sign that if we can get the virus under control, that the economic recovery can go in the right direction.
DEB KNIGHT:
And that's a positive sign but then on the other side of it you’ve got the unemployment figures; 250,000 job losses potentially by Christmas. I mean, that is a massive impost on the unemployment rate and on the queues and on families and on the economy. Is that accurate, that figure, do you think? I mean obviously it's a moveable feast.
JOSH FRYDENBERG:
Well the unemployment rate officially right now is at 7.4 percent and what I forecast yesterday with Treasury's analysis is that the unemployment rate will rise to 9 ¼ percent by the December quarter. But the real number to look at is called the effective unemployment rate, and that takes into account those people who have left the work force altogether, or those who may be stood down on zero hours. And the good news is as the economy starts to come back, that effective unemployment rate will start to come down because more people will start coming back into the economy, looking for jobs, and those on zero hours will start working some hours and gradually more hours over time.
DEB KNIGHT:
Will they, though? Because if we see another outbreak, if we see the situation in Melbourne continue the way it is and potentially, I mean what we're seeing here is not good, and the expectation is on the figures that we will have an improvement, that we will have just a six-week lockdown.
JOSH FRYDENBERG:
Well Deb this is the great uncertainty that we're facing and that's why it's critically important that everybody follows the medical advice. As you know, in Victoria there's a requirement now, a mandatory requirement to wear masks, and people are being very careful in following the medical instructions and there should be penalties for those who do not. Of course we're providing as a Federal Government as much support to the Andrews’ Government as possible. We have more than a thousand Australian defence force personnel who are deployed in Victoria, we have more than 800 Commonwealth officials that are assisting in the health task. We have funded more than 20 respiratory clinics that are undertaking thousands of tests. So we’ll do everything possible to work with the Victorian Government to try to suppress these new cases that we're seeing.
KARL STEFANOVIC:
Really quickly, a couple of things really quickly, tax cuts, when are they coming and who are they going to affect?
JOSH FRYDENBERG:
Well as you know, there was a contrasting narrative at the last election, Karl. We were proposing lower taxes, the other side were proposing higher taxes and the Australian people got behind our proposal and we subsequently legislated it. So people already now are benefitting from that $158 billion worth of tax cuts. But as you say there's an extended timetable that comes out in three different stages and we’ll look at the timing of the tax cuts in accordance with our budget processes. But what we do know is that these are real serious tax reforms. We're creating one big tax bracket between $45,000 and $200,000 where people pay a marginal rate of no more than 30 cents in the dollar. That will cover 94 percent of all taxpayers whereas currently only 63 percent of taxpayers are paying that marginal rate of 30 cents in the dollar or less.
KARL STEFANOVIC:
Big changes coming. Josh, you've had a big week, we appreciate your hard work, we appreciate you being on the show, thank you.